Grant Morgan: Taxing what we eat set to be big election issuefrom NZ Herald May 05, 2008

We certainly live in interesting times, as shown by the new alliances forming in the growing battle over food tax. Everything is going up in price except wages and super.

The life stories I'm hearing every day out on the streets, along with surveys revealing that a large portion of New Zealanders are worried about meeting the next demand for rent or rates, point to the deteriorating state of most family budgets. When electricity, rent, rates, transport and other inflexible costs for life's necessities have to be funded from an income that buys less with each passing week, the first thing to be trimmed back is the family's food purchases.

That's why escalating food prices have produced such a groundswell of public concern and discontent. The flashpoint has become the 12.5 per cent GST tax on all food. Let's assume that the (mythical) average family in New Zealand spends $250 per week on food. Over the course of one year that totals $13,000. If GST was removed from all food, the family would save $1,444. For most people on low-to-modest incomes, an extra $1,444 per year is a substantial amount. And the more that food prices rose, the more each family would save every time they went to the supermarket. And that benefit would last forever.

So why aren't the parties in Parliament falling over themselves to remove GST from food? At every RAM (Residents Action Movement) stall outside every supermarket across Greater Auckland, I hear variations of the same answer from grassroots people: "The politicians don't care about us. They only look after the rich."

Of course, this is strongly denied by "the politicians". A "grand coalition" of the Labour, National and Act parties, limply supported by the Greens, claim that it's impossible to remove GST because of three core reasons: it would be "too complicated", it would be "too costly" and anyway it's merely a "populist" demand. Let's quickly rebut these lame excuses.

First, if many other countries in the world can exempt GST from food, and sometimes other necessities as well, why is it too complicated to do in New Zealand? It doesn't say much for Labour's "knowledge economy".

Second, if Labour and National can promise multi-billion income tax cuts that in the past have been of most benefit to the rich, why is the abolition of GST on food going to be too costly? It seems policies are only unaffordable when they mostly benefit the grassroots, rather than the elites.

And third, since when has it become "populist" - which is used as a bad word - to heed what the majority of people want? Once upon a time this was called democracy.

Fortunately the GST status quo has been bucked by Grey Power and the Maori Party. These two organisations, which together have a membership of over 100,000, are supporting RAM's GST-off-food petition. So early moves by the Labour-National-Act-Green grand coalition to isolate RAM in an attempt to de-legitimise our GST-off-food campaign have failed.

As one Maori woman said when signing RAM's petition outside a Mangere supermarket, having GST on food is "like taxing the air we breathe".

With the backing of petition signatories across New Zealand, RAM can make GST a very big issue in this year's parliamentary election.